Is a music “tax” paid to ISPs the answer?

This is a big issue, with lots of sides to it, and I’m not going to try and get into them all right now, but it’s worth noting that Warner Music — the label run by Edgar Bronfman Jr. (who blew a few billion dollars worth of his family’s booze money on an ill-fated merger with Vivendi way back when) — has hired music-industry veteran Jim Griffin to create an ambitious, and possibly wrongheaded, digital music licensing entity that would see consumers pay their Internet service providers a monthly fee in return for the right to access music online.

Griffin outlines the idea a little in an interview with Portfolio magazine, and notes that it isn’t his idea but has been around a long time — it’s known as a “compulsory license,” and it was what helped the radio industry get out of the trouble it was in when it first became popular as an entertainment medium. Record labels argued that if people could listen to whatever they wanted for free on the radio, no one would buy albums and go to live shows. Sound familiar? Of course, radio play has sold billions of records and made the industry billions of dollars, but there you go.

In any case, Griffin wants to apply the same idea to downloading — and he’s not the only one. The Songwriters Association of Canada has proposed a similar thing, and so have other groups (the EFF has been proposing something similar since 2004). And ISPs are hopping on board this particular train in many cases, in part because they are being threatened with legislation in France and elsewhere that would hold them liable for policing their networks for copyright infringement. But does that make it a good idea? I don’t think so. And however Jim and others describe it, to me it sounds a lot like a tax. Mike Arrington goes further and calls it “protection money.”

Griffin says that “eventually” advertising might cover the charges, and those who wanted to surf without ads would have the choice to pay the fee. But it sounds like in the beginning the fee would be mandatory — even for those who don’t do any downloading at all. Does that sound fair? No. We have mandatory fees for things like education and road-building, but I don’t think music licensing falls into the same category. What about people who pay for songs legally through iTunes — do they get a free pass, or do they have to pay twice? Maybe Warner sees this as a way to put Apple out of business.

And what if such a fee is instituted — what about the movie companies, and other media companies? What about photographers? And what about the billions of dollars in software that is pirated online? After you add all the fees for those content creators, we’ll all be paying $100 for our Internet access (which of course the ISPs have started filtering and shaping because of all the downloading). And then there’s the goat rodeo that would be involved in figuring out who gets the money collected. Or maybe we could just let the ISPs and the music labels work all that out — I’m sure they would do it fairly, right?

Of course, Canadians already pay for the CBC through their income taxes regardless of whether they watch or listen to it, so it’s not like this is unprecedented. The difference is that the CBC is a crown-corporation, so we’re subsidizing salaries of performers and producers, not a for-profit business entity.

If the ISP tax was distributed directly to artists, then I might actually be in favour, but since we know it will go to the record labels instead, the whole idea is ridiculous.

(Almost as ridiculous as a tax on blank recording media.)

Porter

If it really is Intellectual “Property” – the owners of the rights to the “Property” should be taxed based on an assessed value. We tax everything else – land, cars, homes as property. The continual assertion by corporations about protecting their Intellectual Property involves the use of the government to protect it. The corporations should therefore pay their share.

It would then become a self balancing system. Property which becomes very valuable will have a high assessment value – and thus a heavy tax. Much like old people who are forced to move from their family homes due to an inability to pay the property taxes on it – corporations might need then to sell at a lower value, or set free – pieces of “Intellectual Property” in order to avoid paying taxes on it.

This isn’t just about music – anything copyrightable, patentable, etc.

http://www.mathewingram.com/work mathewi

That’s an interesting idea. If the record labels want to charge fees
for access, perhaps they should be paying a kind of property tax. It
would certainly force content owners to confront their devotion to the
“intellectual property” idea.

You make good points on the slippery slope of cultural content, but I would also add software, too. People steal software through via P2P, how can we get compensated for that?

And I said this to Jim directly at SxSW. The biggest issue I have with this scheme is that it taxes the wrong people. Jim is trying to recover money from the declining sale of CDs, but he is not targeting the people who buy CDs, he’s targeting everyone. When he talks about music being purchased now or in the 1990s he always talks about “the average” (or mean) and consumers only being charged about 3-5 dollars per month. However, looking at the average is a red-herring. The fact is MOST people (Mode not Mean) spend 0 (ZERO aka NOTHING) on music in any given month or YEAR. In fact the Median amount spent on music is also ZERO. The vast majority of the North American population does not spend money directly on music. Jim’s plan in effect forces the majority of the population to subsidize a small group of people like me who do buy music.

http://www.mathewingram.com/work mathewi

You are right software, David — I will add that to the list. And
that is an excellent point about the approach Jim is taking: it
penalizes people who not only don’t download music, but likely don’t
buy it in any form whatsoever — and they have to subsidize the
activities of a small group. That’s just blatantly unfair.

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